Fiserv and LeaseQuery, a provider of purpose-built lease accounting software, have forged a new agreement to enable financial organisations to advance their lease accounting processes and comply with industry standards.
The partnership will result in users of Fiserv’s Prologue Financials accounting software get access to the purpose-built lease accounting software from LeaseQuery.
Fiserv’s Prologue Financials is said to help financial institutions to boost the efficiency of financial accounting processes through built-in automation and controls. The collaboration with LeaseQuery gives users of Prologue Financials to gain access to cloud-based lease accounting capabilities, which include automated lease assets, disclosure reports, and journal entries.
Fiserv digital efficiency group senior vice president and general manager Aldor Delp said: “While some financial institutions with a small number of operating leases may be able to continue to track those leases in spreadsheets, this will be a labor-intensive and impractical process for most institutions.
“The continually changing accounting environment is a catalyst for automation, which can improve not only the efficiency of the lease accounting process, but also its accuracy.”
According to Fiserv, traditionally operating leases have been seen as off-balance sheet transactions, which have been usually tracked manually in spreadsheets. However, this approach changed when the US Financial Accounting Standards Board (FASB) issued a new standard for lease accounting, called ASC 842, under which financial institutions have to recognise operating leases for retail branches and office space after the start of the lease.
Owing to the changes, financial organisatons can witness a 60-70% average increase in lease liabilities on their balance sheet, as per the recent Lease Liabilities Index Report released by LeaseQuery.
LeaseQuery CEO comments on the need for a purpose-built lease accounting solution
LeaseQuery CEO and founder George Azih said: “While the new lease accounting standards may not change how financial institutions make loan or leasing decisions, the way those decisions appear on the balance sheet is significantly different.
“Lease accounting can be quite complex, so having easy access to a purpose-built solution will help streamline this transition for financial institutions and is a real benefit for those using Prologue Financials.”
